Consumers Say They Care About Sustainability, But Do They Buy the Products?

A recent study by NielsenIQ found 78% of U.S. consumers saying a sustainable lifestyle is important to them, and a 2020 McKinsey U.S. consumer sentiment survey found more than 60% of respondents said they would pay more for a product with sustainable packaging.  But many CPG execs say they just can't generate sufficient consumer demand for these products.  And more to the point, do environmental or sustainability claims boost the sales of alcoholic beverages.

A brand new McKinsey and NielsenIQ study found that nearly 55% of beer, cider and  FMBs made ESG claims, but their growth differential actually lagged most other beverages. That result isn't necessarily transferable to spirits or wine because (1) beer has been declining in sales for more than a decade while the other categories have been stable or rising, and (2) McKinsey/NielsenIQ didn't ask about spirits and wine.

Still, the study generally found that consumers do indeed put their money where their mouth is – products making ESG-related claims averaged 28% cumulative growth over the past five years vs. 20% for products that didn't make such claims.  

While the study does have its limitations – it examined correlations, not causations, for instance – it did reveal and clear and material links between ESG-related claims and consumer spending.  Interestingly enough,  

For the CPG category generally, products that made the least prevalent claims, such as "vegan" or "carbon zero," grew 8.5% more than peers that didn't make them.  Yet even products making  widespread claims such as "environmentally sustainable" still enjoyed roughly 2% higher growth than products that didn’t make them, suggesting that commonplace claims can be differentiating.

The study also showed that real consumers don't always respond to the same ESG claim the same way across all categories.  But they do tend to reward products that make multiple ESG-related claims.